CZR filing — read by section

Item 2. Management’s Discussion and Analysis

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 
 You should read the following discussion together with the financial statements, including the related notes and the other financial information, contained in this Quarterly Report on Form 10-Q. 
 Caesars Entertainment, Inc., a Delaware corporation formerly known as Eldorado Resorts, Inc. (“ERI” or “Eldorado”), is referred to as the “Company,” or the “Registrant,” and together with its subsidiaries may also be referred to as “we,” “us” or “our.” 
 
 Overview 
 We are a geographically diversified gaming and hospitality company with 23 gaming facilities in 11 states as of June 30, 2020. As of June 30, 2020, our properties were located in Colorado, Florida, Illinois, Indiana, Iowa, Mississippi, Missouri, Louisiana, Nevada, New Jersey and Ohio, and featured approximately 23,900 slot machines, video lottery terminals (“VLTs”) and e-tables, approximately 660 table games and approximately 11,300 hotel rooms. On July 20, 2020, we completed the merger in which a wholly-owned subsidiary of the Company merged with and into Caesars Entertainment Corporation (“Former Caesars”) with Former Caesars surviving as a wholly-owned subsidiary of the Company (the “Merger”) pursuant to the Agreement and Plan of Merger dated as of June 24, 2019 (as amended by Amendment No. 1 to Agreement and Plan of Merger, dated as of August 15, 2019, the “Merger Agreement”). As a result of the Merger, we currently own an aggregate of 54 domestic properties in 16 states with approximately 60,400 slot machines, VLTs and e-tables, approximately 3,350 table games and approximately 51,200 hotel rooms, which includes international operations in five countries outside of the U.S. Our primary source of revenue is generated by gaming operations, and we utilize our hotels, restaurants, bars, entertainment, racing, sportsbook offerings, retail shops and other services to attract customers to our properties. 
 We were founded in 1973 by the Carano family with the opening of the Eldorado Hotel Casino in Reno, Nevada and in 1993 partnered with MGM Resorts International to build Silver Legacy Resort Casino in Reno, Nevada. Beginning in 2005, we grew through a series of acquisitions, including the acquisition of Eldorado Shreveport in 2005, MTR Gaming Group, Inc. in 2014, Circus Circus Reno (“Circus Reno”) and the 50% membership interest in the Silver Legacy that was owned by MGM Resorts International in 2015, Isle of Capri Casinos, Inc. (“Isle” or “Isle of Capri”) in 2017 and Grand Victoria Casino (“Elgin”) and Tropicana Entertainment, Inc. (“Tropicana”) in 2018. 
 As of June 30, 2020, we owned 18 of our casinos and leased five casinos that are subject to a master lease with GLP Capital, L.P., the operating partnership of Gaming and Leisure Properties, Inc. (“GLPI”), that we entered into in connection with the Tropicana Acquisition on October 1, 2018 (as amended, the “GLPI Master Lease”). See full description under the “GLPI Master Lease”. 
 In connection with the Merger, Caesars Entertainment Corporation changed its name to “Caesars Holdings, Inc.” and Eldorado Resorts, Inc. converted into a Delaware corporation and changed its name to “Caesars Entertainment, Inc.” In addition, effective as of July 21, 2020 our ticker symbol on the NASDAQ Stock Market changed from “ERI” to “CZR”. In connection with the execution of the Merger Agreement, we also entered into a Master Transaction Agreement (the “MTA”) with VICI Properties L.P., a Delaware limited partnership (“VICI”), pursuant to which, among other things, we agreed to consummate certain sale and leaseback transactions and amend certain lease agreements with VICI and/or its affiliates, with respect to certain property described in the MTA. 
 We periodically divest of assets in order to raise capital. We also divested certain assets, and will be required to divest additional assets, in connection with obtaining required regulatory approvals in preparation of the Merger. A summary of recently completed and planned divestitures of our properties as of June 30, 2020 is as follows: 
 
 Segment Property Date Sold State 
 East Presque Isle Downs & Casino (“Presque”) January 11, 2019 Pennsylvania 
 East Lady Luck Casino Nemacolin (“Nemacolin”) March 8, 2019 Pennsylvania 
 East Mountaineer Casino, Racetrack and Resort (“Mountaineer”) December 6, 2019 West Virginia 
 Midwest Isle Casino Cape Girardeau (“Cape Girardeau”) December 6, 2019 Missouri 
 Midwest Lady Luck Casino Caruthersville (“Caruthersville”) December 6, 2019 Missouri 
 Midwest Isle of Capri Casino Kansas City (“Kansas City”) July 1, 2020 (a) Missouri 
 South Lady Luck Casino Vicksburg (“Vicksburg”) July 1, 2020 (a) Mississippi 
 South Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) N/A (b) Louisiana 
 West MontBleu Casino Resort & Spa (“MontBleu”) N/A (b) Nevada 
 Central Tropicana Evansville (“Evansville”) N/A (c) Indiana 

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 (a) On July 10, 2019, we entered into a definitive agreement to sell Kansas City and Vicksburg to Twin River Worldwide Holdings, Inc. (“Twin River”) for cash consideration of approximately $230 million, subject to a working capital adjustment. The transaction closed on July 1, 2020. Kansas City and Vicksburg met the requirements for presentation as assets held for sale as of June 30, 2020 and December 31, 2019 . 
 (b) On April 24, 2020, we entered into a definitive purchase agreement with Twin River to sell the equity interests of Eldorado Resort Casino Shreveport Joint Venture and Columbia Properties Tahoe, LLC, the entities that hold Eldorado Shreveport and MontBleu for aggregate consideration of $155 million and terminated the prior agreement to sell those assets. The agreement is subject to regulatory approvals and is expected to close in the first quarter of 2021. Eldorado Shreveport and MontBleu met the requirements for presentation as assets held for sale under generally accepted accounting principles as of June 30, 2020. In conjunction with the classification of MontBleu’s operations as assets held for sale as a result of the announced sale, an impairment charge totaling $45.6 million was recorded during the six months ended June 30, 2020 due to the carrying value exceeding the estimated net sales proceeds. 
 (c) In connection with its review of the Merger, the Indiana Gaming Commission determined on July 16, 2020 that we will be required to divest three properties within the state of Indiana in order to avoid undue economic concentrations as conditions to the Indiana Gaming Commission’s approval of the Merger. As a result, we plan to enter into agreements to divest of Evansville, as well as two additional properties that we acquired as a result of the Merger, prior to December 31, 2020. 
 
 Merger Related Activities 
 Merger with Caesars Entertainment Corporation 
 On July 20, 2020, the Merger was consummated and Former Caesars became a wholly-owned subsidiary of ours. The strategic rationale for the Merger includes, but is not limited to, the following: 
 • Creation of the largest owner, operator and manager of domestic gaming assets 
 • The largest and most diversified domestic footprint 
 • Iconic brands, rewards program and new gaming opportunities expected to enhance customer experience 
 • Realization of significant identified synergies 
 Based on the closing price of $38.00 per share of Company common stock, par value $0.00001 per share (“Company Common Stock”), reported on NASDAQ on July 17, 2020, the aggregate implied value of the aggregate merger consideration paid to former holders of Former Caesars common stock in connection with the Merger was approximately $8.46 billion, including approximately $2.37 billion in Company Common Stock and approximately $6.09 billion in cash. The aggregate merger consideration transferred also included the repayment of certain outstanding debt balances of Former Caesars and the replacement of equity awards of certain employees attributable to services provided prior to the Merger. 
 The cash consideration paid in the Merger was $12.41 per share (inclusive of the applicable ticking fee) of Former Caesars common stock for which cash consideration was payable and the stock consideration per share of Former Caesars common stock for which stock consideration was payable was 0.3085 shares of Company Common Stock, with a value equal to approximately $12.41 in cash (based on the volume weighted average price per share of Company Common Stock for the 10 trading days ending on July 16, 2020). Following the consummation of the Merger, Eldorado’s and Former Caesars’ stockholders hold approximately 56% and 44%, respectively, of the outstanding shares of Company Common Stock. 
 The major classes of assets acquired through the Merger include cash, cash equivalents and restricted cash, accounts receivable, including receivables from affiliates, property and equipment, goodwill and intangible assets, and other assets. The major classes of liabilities assumed through the Merger include accounts payable, accrued expenses, contract liabilities, financing obligations and long-term debt, which includes $1.1 billion in aggregate principal amount of 5% convertible notes due 2024 that are convertible into the weighted average of the number of shares of Company Common Stock and amount of cash actually received by holders of common stock of Former Caesars that made elections for consideration in the Merger. 
 Given the short period of time from the Merger completion date and the date of these consolidated financial statements and the size and complexity of the transaction, the initial accounting for the business combination is incomplete at this time. We are not able to provide the valuation of certain components of consideration transferred or provide the allocation of consideration paid to the assets acquired or liabilities assumed. Supplemental pro forma revenue and earnings of the combined company are predicated on the completion of the business combination accounting and allocation of consideration. 
 We recognized acquisition-related transaction costs of $12.7 million and $22.0 million for the three and six months ended June 30, 2020, respectively, and $4.5 million for the three and six months ended June 30, 2019. 
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 Debt and Financing Activity 
 On July 6, 2020, a wholly-owned subsidiary of ours issued $3.4 billion aggregate principal amount of 6.250% Senior Secured Notes due 2025 (the “2025 Secured Notes”) and $1.8 billion aggregate principal amount of 8.125% Senior Notes due 2027 (the “2027 Senior Notes”). We assumed the obligations under the 2025 Secured Notes and 2027 Senior Notes upon consummation of the Merger. In addition, Caesars Resort Collection (“CRC”), a subsidiary of Former Caesars, issued $1.0 billion aggregate principal amount of 5.750% Senior Secured Notes due 2025 (the “CRC Secured Notes”). 
 On July 20, 2020, in connection with the closing of the Merger, we entered into a new credit agreement which provides a five-year senior secured revolving credit facility for an aggregate principal amount of $1.0 billion (the “ERI Revolving Credit Facility”) and an additional revolving credit facility commitment under the ERI Revolving Credit Facility in an aggregate principal amount equal to $185 million, and CRC entered into an incremental agreement to its existing credit agreement dated as of December 22, 2017 for an aggregate principal amount of $1.8 billion of incremental term loan and an additional $25 million of revolving credit facility commitments. The additional capacities of $185 million under the ERI Revolving Credit Facility and $25 million under the existing CRC revolving credit facility are subject to approval from certain gaming authorities which we expect to receive in the third quarter of 2020. In addition, the borrowing capacity and obligations under CRC’s existing $1.0 billion revolving credit facility remain outstanding following the consummation of the Merger. 
 A portion of the proceeds from these arrangements, as well as our cash on hand, was used (a) to fund a portion of the cash consideration of the Merger, (b) to prepay in full the loans outstanding and terminate all commitments under our existing Credit Agreement, dated as of April 17, 2017, (c) to satisfy and discharge our 6% Senior Notes due 2025, the Senior Notes due 2026 and the 7% Senior Notes due 2023, (d) to repay $975 million of the outstanding amount under CRC’s existing revolving credit facility, (e) to repay in full the loans outstanding and terminate all commitments under the CEOC, LLC Credit Agreement, dated as of October 6, 2017, (f) to pay fees and expenses related to the financing arrangements, and (g) for general corporate use. See Note 11. 
 VICI Transactions 
 In connection with the closing of the Merger on July 20, 2020, we consummated a series of transactions with VICI in accordance with the Master Transaction Agreement (“MTA”) entered on June 24, 2019 and the Purchase and Sales Agreement entered on September 26, 2019. We consummated the sale leaseback transactions related to Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Resort Atlantic City, including the Harrah’s Atlantic City Waterfront Conference Center, for approximately $1.82 billion of net proceeds. Additionally, we received a one-time payment from VICI of approximately $1.38 billion for amendments to VICI lease agreements. The Caesars Palace Las Vegas (“CPLV”) Lease with VICI was amended to include Harrah’s Las Vegas (“HLV”) under the CPLV lease and increased HLV’s annual rent by $15 million and CPLV’s annual rent by $84 million. In addition, Harrah’s New Orleans, Harrah’s Laughlin, Harrah’s Resort Atlantic City and the Harrah’s Atlantic City Waterfront Conference Center were added to the Non-CPLV lease with VICI, with an increase in total aggregate annual rent for these properties of $154 million. The CPLV, Non-CPLV and Joliet lease agreements, as well as the Golf Course Use Agreement, were extended such that there will be 15 years remaining until the expiration of the initial term. The amendment also contains a put-call agreement related to the Centaur properties pursuant to which CRC may require VICI or its applicable affiliate to purchase and lease back (as lessor) to the Company or its applicable affiliate(s) the real estate components of the gaming and racetrack facilities of Hoosier Park Racing & Casino (“Hoosier Park”) and Indiana Grand Racing & Casino (“Indiana Grand”) and VICI or its applicable affiliate may require CRC to sell to VICI or its affiliate(s) and lease back (as lessee) the real estate components of such gaming and racetrack facilities. 
 On June 15, 2020, we entered into a non-binding letter of intent with VICI to borrow a new 5-year, $400 million mortgage loan (the “Convention Center Mortgage Loan”) and sell to VICI approximately 23 acres of land in the vicinity of, or adjacent to, The LINQ, Bally’s Paris and Planet Hollywood in Las Vegas, Nevada and commonly known as the Eastside Land (the “Eastside Land Sale”). The Convention Center Mortgage Loan and the Eastside Land Sale are expected to close concurrently and are subject to customary closing conditions, including completion of due diligence, and negotiation of definitive documents and receipt of regulatory approvals. These transactions are expected to close in the third quarter of 2020. 
 
 Partnerships and Development Opportunities 
 William Hill 
 In September 2018, we entered into a 25-year agreement, which became effective January 2019, with William Hill PLC and William Hill US, its U.S. subsidiary (together, “William Hill”) pursuant to which we (i) granted to William Hill the right to conduct betting activities in retail channels and under our first skin and third skin for online channels with respect to our current and future properties located in the United States and the territories and possessions of the United States, including Puerto Rico and the U.S. Virgin Islands and (ii) agreed that William Hill will have the right to conduct real money online 
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 gaming activities utilizing our second skin available with respect to properties in such territories . Pursuant to the terms of the agreement, we received a 20% ownership interest in William Hill US valued at approximately $128.9 million as well as 13.4 million ordinary shares of William Hill PLC with an initial value of approximately $27.3 million upon closing of the transaction in January 2019. Our profit and losses attributable to William Hill US are included in income (loss) from unconsolidated affiliates on the Consolidated Statements of Operations. The amortization of deferred revenues associated with our equity interests is included in other revenue within our corporate and other segment. Additionally, we receive a profit share from the operations of betting and other gaming activities associated with our properties, which is included in other revenue at the respective property. 
 The Stars Group/Flutter Entertainment 
 In November 2018, we entered into a 20-year agreement with The Stars Group Inc. (“TSG”) pursuant to which we agreed to provide TSG with options to obtain access to our second skin for online sports wagering and third skin for real money online gaming and poker, in each case with respect to our properties in the United States. Under the terms of the agreement, we will receive a revenue share from the operation of the applicable verticals by TSG under our licenses. Pursuant to the terms of the TSG agreement, we received 1.1 million TSG common shares valued at approximately $18.6 million and an additional $5.0 million in TSG common shares became payable to us upon TSG’s exercise of its first option, which shares we received in the fourth quarter of 2019. In December 2019, we sold approximately 0.5 million of our TSG common shares at the request of William Hill and remitted the proceeds to them in accordance with the terms of our William Hill agreement. We may also receive additional TSG common shares in the future based on TSG net gaming revenue generated in our markets. Upon entry into the TSG agreement, we recorded deferred revenue associated with the shares received and recognize revenue, which is included in other revenue within our corporate and other segment. On May 5, 2020, Flutter Entertainment PLC (“Flutter”) completed the acquisition of all of the issued and outstanding common shares of TSG in exchange for 0.2253 Flutter shares per common share of TSG. 
 Pompano Joint Venture 
 In April 2018, we entered into a joint venture with Cordish Companies (“Cordish”) to master plan and develop a mixed-use entertainment and hospitality destination expected to be located on unused land adjacent to the casino and racetrack at our Pompano property. As the managing member, Cordish will operate the business and manage the development, construction, financing, marketing, leasing, maintenance and day-to-day operation of the various phases of the project. Additionally, Cordish will be responsible for the development of the master plan for the project with our input and will submit it for our review and approval. We have made cash contributions totaling $1.0 million and have agreed to contribute a total of approximately 130 to 200 acres of land to the joint venture for the project. As of June 30, 2020, we have contributed approximately 20 acres to the joint venture at an approximate fair value of $6.6 million. While we hold a 50% variable interest in the joint venture, we are not the primary beneficiary; as such, the investment in the joint venture is accounted for using the equity method. We participate evenly with Cordish in the profits and losses of the joint venture, which is included in income (loss) from unconsolidated affiliates on the Consolidated Statements of Operations. 
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 Reportable Segments 
 The following table sets forth certain information regarding our properties (listed by segment in which each property is reported) as of June 30, 2020: 
 
 Segment Property Date Acquired State 
 West Eldorado Resort Casino Reno (“Eldorado Reno”) (a) Nevada 
 Silver Legacy Resort Casino (“Silver Legacy”) (a) Nevada 
 Circus Circus Reno (“Circus Reno”) (a) Nevada 
 MontBleu Casino Resort & Spa (“MontBleu”) October 1, 2018 (c) Nevada 
 Tropicana Laughlin Hotel & Casino (“Laughlin”) October 1, 2018 Nevada 
 Isle Casino Hotel - Blackhawk (“Isle Black Hawk”) May 1, 2017 Colorado 
 Lady Luck Casino - Black Hawk (“Lady Luck Black Hawk”) May 1, 2017 Colorado 
 
 Midwest (b) Isle Casino Waterloo (“Waterloo”) May 1, 2017 Iowa 
 Isle Casino Bettendorf (“Bettendorf”) May 1, 2017 Iowa 
 Isle of Capri Casino Boonville (“Boonville”) May 1, 2017 Missouri 
 Isle of Capri Casino Kansas City (“Kansas City”) May 1, 2017 (c) Missouri 
 
 South Isle Casino Racing Pompano Park (“Pompano”) May 1, 2017 Florida 
 Eldorado Resort Casino Shreveport (“Eldorado Shreveport”) (a) (c) Louisiana 
 Isle of Capri Casino Hotel Lake Charles (“Lake Charles”) May 1, 2017 Louisiana 
 Belle of Baton Rouge Casino & Hotel (“Baton Rouge”) October 1, 2018 Louisiana 
 Isle of Capri Casino Lula (“Lula”) May 1, 2017 Mississippi 
 Lady Luck Casino Vicksburg (“Vicksburg”) May 1, 2017 (c) Mississippi 
 Trop Casino Greenville (“Greenville”) October 1, 2018 Mississippi 
 
 East (b) Eldorado Gaming Scioto Downs (“Scioto Downs”) (a) Ohio 
 Tropicana Casino and Resort, Atlantic City (“Trop AC”) October 1, 2018 New Jersey 
 
 Central Grand Victoria Casino (“Elgin”) August 7, 2018 Illinois 
 Lumière Place Casino (“Lumière”) October 1, 2018 Missouri 
 Tropicana Evansville (“Evansville”) October 1, 2018 (c) Indiana 

 (a) Property was aggregated into segment prior to January 1, 2016. 
 (b) Presque was sold on January 11, 2019, Nemacolin was sold on March 8, 2019 and Mountaineer was sold on December 6, 2019. All three properties were previously reported in the East segment. Cape Girardeau and Caruthersville were sold on December 6, 2019. Both properties were previously reported in the Midwest segment. 
 (c) We entered into agreements to sell Kansas City, Vicksburg, Eldorado Shreveport and MontBleu. The Kansas City and Vicksburg sales closed on July 1, 2020. The Eldorado Shreveport and MontBleu sales are expected to close in the first quarter of 2021. We plan to reach an agreement to divest of Evansville prior to December 31, 2020. 
 The executive decision maker of our Company reviews operating results, assesses performance and makes decisions on a “significant market” basis. Management views each of our casinos as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. Our principal operating activities occur in five geographic regions and reportable segments. The reportable segments are based on the similar characteristics of the operating segments within the regions in which they operate: West, Midwest, South, East, and Central. See the table above for a listing of properties included in each segment. 
 
 Presentation of Financial Information 
 The financial information included in this Item 2 for periods after our sales of Presque and Nemacolin on January 11, 2019 and March 8, 2019, respectively, and our sales of Mountaineer, Cape Girardeau and Caruthersville on December 6, 2019 are not fully comparable to the periods prior to their respective sale dates. See Note 5. 
 Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide information to assist in better understanding and evaluating our financial condition and results of operations. Our historical operating results may not be indicative of our future results of operations because of these factors and the changing competitive landscape in each of our markets, as well as by factors discussed elsewhere herein. We recommend that you read 
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 this MD&A in conjunction with our unaudited consolidated financial statements and the notes to those statements included in this Quarterly Report on Form 10-Q. 
 Key Performance Metrics 
 Our primary source of revenue is generated by our gaming operations, but we use our hotels, restaurants, bars, entertainment, retail shops, racing, sportsbook offerings and other services to attract customers to our properties. Our operating results are highly dependent on the volume and quality of customers visiting and staying at our properties. Key performance metrics include volume indicators such as table games drop and slot handle, which refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. In addition, hotel occupancy and price per room designated by average daily rate (“ADR”) are key indicators for our hotel business. Our calculation of ADR consists of the average price of occupied rooms per day including the impact of resort fees and complimentary rooms. Complimentary room rates are determined based on an analysis of retail or cash rates for each customer segment and each type of room product to estimate complimentary rates which are consistent with retail rates. Complimentary rates are reviewed at least annually and on an interim basis if there are significant changes in market conditions. Complimentary rooms are treated as occupied rooms in our calculation of hotel occupancy. 
 
 Recent Developments and Significant Factors Impacting Financial Results 
 The following summary highlights recent developments and significant factors impacting our financial results for the three and six months ended June 30, 2020 and 2019. 
 • COVID-19 Public Health Emergency – In January 2020, an outbreak of a new strain of coronavirus was identified and has since spread throughout much of the world, including the United States. All of our casino properties were temporarily closed for the period from mid-March 2020 through mid-May 2020 due to orders issued by various state government agencies as part of certain precautionary measures intended to help slow the spread of the COVID-19 public health emergency. On May 18, 2020, we began reopening our properties and have resumed certain operations at all of our properties as of June 30, 2020, with the exception of Elgin and Trop AC which reopened on July 1 and July 2, 2020, respectively. As a result of the temporary closures, the COVID-19 public health emergency has had a material adverse effect on our business, financial condition and results of operations for the three and six months ended June 30, 2020. We continued to pay our full-time employees through April 10, 2020, including tips and tokens. Effective April 11, 2020, we furloughed approximately 90% of our employees, implemented salary reductions and committed to continue to provide benefits to our employees through June 30, 2020. Subsequently, the benefit coverage for furloughed employees was extended through August 31, 2020. A portion of the workforce has returned to service as the properties have resumed with limited capacities and in compliance with operating restrictions in accordance with governmental orders, directives and guidelines. As a result of these payroll changes combined with other cost saving measures, our daily operating expenses were reduced significantly. On June 15, 2020, in order to address the effects of the property closures resulting from the ongoing COVID-19 public health emergency, we obtained waivers on the financial covenant on our existing credit facility agreements and GLPI Master Lease. The amendment to our GLPI Master Lease is subject to the receipt of applicable gaming regulatory approvals, the provision of applicable gaming regulatory notices and the expiration of applicable gaming regulatory advance notice periods. As of June 30, 2020, the amendment was not effective. 
 The extent of the ongoing and future effects of the COVID-19 public health emergency on our business and the casino resort industry generally is uncertain, but we expect that it will continue to have a significant impact on our business, results of operations and financial condition. The extent and duration of the impact of COVID-19 will ultimately depend on future developments, including but not limited to, the duration and severity of the outbreak, varying levels of restrictions on operations imposed by governmental authorities, the potential for authorities reimposing stay at home orders or additional restrictions in response to continued developments with the COVID-19 public health emergency, our ability to adapt to evolving operating procedures, the impact on consumer demand and discretionary spending, the length of time it takes for demand to return and our ability to adjust our cost structures for the duration of the outbreak’s impact on our operations. 
 • Caesars Acquisition – The Merger closed on July 20, 2020. Transaction costs related to our acquisition of Caesars totaled $12.7 million and $22.0 million for the three and six months ended June 30, 2020, respectively, and $4.5 million for the three and six months ended June 30, 2019. Pursuant to the MTA with VICI, we are required to reimburse VICI for 50% of any prepayment penalties in connection with VICI’s payoff related to its CPLV loan, regardless of whether the Merger closing occurs. As of June 30, 2020 and 
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 December 31, 2019, our proportionate share of VICI’s prepayment penalty paid in 2019 was accrued and totaled approximately $55.4 million. 
 • Presque and Nemacolin Divestitures - The sales of Presque and Nemacolin did not meet the requirements for presentation as discontinued operations and are included in income from continuing operations for the periods prior to their respective closing dates for the six months ended June 30, 2019. We closed the sales of Presque and Nemacolin on January 11, 2019 and March 8, 2019, respectively, and recorded a net gain of $22.2 million. 
 • Mountaineer, Cape Girardeau and Caruthersville Divestitures – The sales of Mountaineer, Cape Girardeau and Caruthersville did not meet the requirements for presentation as discontinued operations and are included in income from continuing operations for the periods prior to their closing date for the three and six months ended June 30, 2019. We closed the sales of these properties on December 6, 2019 and recorded a net gain of $28.6 million during the fourth quarter of 2019. 
 • Eldorado Shreveport and MontBleu Divestitures - The sales of Eldorado Shreveport and MontBleu did not meet the requirements for presentation as discontinued operations and are included in income from continuing operations. In conjunction with the classification of MontBleu’s operations as assets held for sale as a result of the announced sale, an impairment charge totaling $45.6 million was recorded during the six months ended June 30, 2020 due to the carrying value exceeding the estimated net sales proceeds. 
 • Impairment Charges – As a result of declines in recent performance and the expected impact on future cash flows as a result of COVID-19, we recognized impairment charges related to goodwill and trade names totaling $99.5 million and $15.6 million, respectively, during the six months ended June 30, 2020. 
 • Weather and Construction Disruption - All of our segments were negatively impacted by severe weather, including flooding, during the first quarter of 2019 compared to the same current year period. Additionally, our West segment was negatively impacted by disruption to our casino floor and hotel availability associated with renovation projects at our Black Hawk properties during the construction period from January to June 2019. 
 The divestitures of Presque, Nemacolin and Mountaineer, Cape Girardeau and Caruthersville in January, March and December 2019, respectively, are collectively referred to as the “Divestitures.” 
 
 Results of Operations 
 The following table highlights the results of our operations (dollars in thousands): 
 
 Three Months Ended
June 30, Six Months Ended
June 30, 
 2020 2019 Change 2020 2019 Change 
 Net revenues $ 126,470 $ 637,121 (80.1) % $ 599,539 $ 1,272,944 (52.9) % 
 Operating (loss) income (78,327) 102,550 (176.4) % (201,507) 226,154 (189.1) % 
 Net (loss) income (99,996) 18,936 (628.1) % (275,634) 57,165 (582.2) % 

 
 
 Operating Results . Net revenues declined $510.7 million and $673.4 million, or 80.1% and 52.9%, for the three and six months ended June 30, 2020, respectively, compared to the same prior year periods. Excluding the impact of the Divestitures, net revenues decreased $455.0 million and $555.1 million, or 78.2% and 48.1%, for the three and six months ended June 30, 2020, respectively, compared to the same prior year periods. The decline in net revenues was primarily due to the negative impact of COVID-19 and the resulting closure of our properties in mid-March 2020, which began reopening mid-May 2020 based on state orders and restrictions. 
 Operating (loss) income declined $180.9 million and $427.7 million, or 176.4% and 189.1%, for the three and six months ended June 30, 2020, respectively, compared to the same prior year periods. Excluding the impact of the Divestitures, operating (loss) income decreased $170.6 million and $408.2 million, or 184.9% and 197.5%, for the three and six months ended June 30, 2020, respectively. The changes in operating (loss) income were mainly due to the negative impact of COVID-19 on net revenues in addition to transaction costs associated with the acquisition of Caesars and impairment charges totaling $160.8 million recorded during the six months ended June 30, 2020. 
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 Net (loss) income decreased $118.9 million and $332.8 million, or 628.1% and 582.2%, for the three and six months ended June 30, 2020, respectively, compared to the same prior year periods. Excluding the impact of the Divestitures, net (loss) income decreased $111.1 million and $317.7 million or 1001.5% and 755.5% for the three and six months ended June 30, 2020, respectively. The changes to net (loss) income, including Divestitures, were principally due to the same factors impacting operating (loss) income, offset by the benefit for income taxes totaling $33.7 million for the three months ended June 30, 2020 as compared to a provision of $10.4 million for the comparative period and a benefit of $70.8 million for six months ended June 30, 2020 as compared to a provision of $20.8 million for the comparative period. 
 
 Net Revenues and Net (Loss) Income 
 The following tables highlight our net revenues and net (loss) income by reportable segment (in thousands): 
 
 Net Revenues for the 
Three Months Ended June 30, Net (Loss) Income for the 
Three Months Ended June 30, 
 2020 2019 2020 2019 
 West $ 29,937 $ 127,727 $ (12,711) $ 11,348 
 Midwest 22,787 97,239 1,378 21,435 
 South 30,760 116,937 (10,912) 12,747 
 East 21,226 170,455 (30,456) 15,981 
 Central 19,848 122,792 (20,452) 13,070 
 Corporate and Other 1,912 1,971 (26,843) (55,645) 
 Total $ 126,470 $ 637,121 $ (99,996) $ 18,936 

 
 Net Revenues for the 
Six Months Ended June 30, Net (Loss) Income for the 
Six Months Ended June 30, 
 2020 2019 2020 2019 
 West $ 135,427 $ 245,822 $ (104,011) $ 15,665 
 Midwest 83,580 194,026 (15,239) 43,590 
 South 127,812 249,651 (24,910) 32,956 
 East 129,282 336,688 (32,647) 27,149 
 Central 119,553 243,264 (15,728) 25,948 
 Corporate and Other 3,885 3,493 (83,099) (88,143) 
 Total $ 599,539 $ 1,272,944 $ (275,634) $ 57,165 

 
 
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 Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019 
 Net revenues and operating expenses were as follows (dollars in thousands): 
 
 Three Months Ended
June 30, Percent
Change 
 2020 2019 Variance 
 Revenues: 
 Gaming and Pari-Mutuel Commissions: 
 West $ 15,276 $ 55,493 $ (40,217) (72.5) % 
 Midwest 21,119 85,223 (64,104) (75.2) % 
 South 27,303 94,871 (67,568) (71.2) % 
 East 19,777 124,052 (104,275) (84.1) % 
 Central 18,004 97,523 (79,519) (81.5) % 
 Total Gaming and Pari-Mutuel Commissions 101,479 457,162 (355,683) (77.8) % 
 Non-gaming: 
 West 14,661 72,234 (57,573) (79.7) % 
 Midwest 1,668 12,016 (10,348) (86.1) % 
 South 3,457 22,066 (18,609) (84.3) % 
 East 1,449 46,403 (44,954) (96.9) % 
 Central 1,844 25,269 (23,425) (92.7) % 
 Corporate and Other 1,912 1,971 (59) (3.0) % 
 Total Non-gaming 24,991 179,959 (154,968) (86.1) % 
 Total Net Revenues 126,470 637,121 (510,651) (80.1) % 
 Expenses: 
 Gaming and Pari-Mutuel Commissions: 
 West 5,314 20,862 (15,548) (74.5) % 
 Midwest 8,355 34,176 (25,821) (75.6) % 
 South 13,319 45,377 (32,058) (70.6) % 
 East 12,839 59,057 (46,218) (78.3) % 
 Central 3,527 43,768 (40,241) (91.9) % 
 Total Gaming and Pari-Mutuel Commissions 43,354 203,240 (159,886) (78.7) % 
 Non-gaming 
 West 7,029 38,634 (31,605) (81.8) % 
 Midwest 1,092 6,323 (5,231) (82.7) % 
 South 2,427 13,624 (11,197) (82.2) % 
 East 2,557 23,884 (21,327) (89.3) % 
 Central 2,170 12,891 (10,721) (83.2) % 
 Total Non-gaming 15,275 95,356 (80,081) (84.0) % 
 
 Marketing and promotions 5,105 32,080 (26,975) (84.1) % 
 General and administrative 64,862 117,431 (52,569) (44.8) % 
 Corporate 13,050 21,051 (8,001) (38.0) % 
 Depreciation and amortization 48,939 56,533 (7,594) (13.4) % 
 Total Operating Expenses $ 190,585 $ 525,691 $ (335,106) (63.7) % 

 39 

 
 

 Gaming Revenues and Pari-Mutuel Commissions. For the three months ended June 30, 2020 compared to the same prior year period, gaming revenues and pari-mutuel commissions declined 77.8%. Excluding the impact of the Divestitures, gaming revenues and pari-mutuel commissions decreased 75.2% for the three months ended June 30, 2020 compared to the same prior year period mainly due to reductions in casino volume and pari-mutuel commissions associated with the impact of COVID-19 and the related closures of our properties and race tracks in mid-March 2020 until reopening of properties starting mid-May 2020. 
 Non-gaming Revenues . Non-gaming revenues decreased 86.1% for the three months ended June 30, 2020 compared to the same prior year period. Excluding the impact of the Divestitures, non-gaming revenues declined 85.5% for the three months ended June 30, 2020 compared to the same prior year period mainly due to the impact of COVID-19 and the related closures of our properties, including hotels, restaurants and entertainment venues in mid-March 2020 until reopening of hotels and restaurants starting mid-May 2020 based on government reopening guidelines. 
 Gaming Expenses and Pari-Mutuel Commissions . Gaming expenses and pari-mutuel commissions declined 78.7% for the three months ended June 30, 2020 compared to the same prior year period. Excluding the impact of the Divestitures, gaming expenses and pari-mutuel commissions decreased 75.4% for the three months ended June 30, 2020 compared to the same prior year period in conjunction with the previously discussed decrease in gaming revenues and pari-mutuel commissions. 
 Non-gaming Expenses . Non-gaming expenses declined 84.0% for the three months ended June 30, 2020 compared to the same prior year period. Excluding the impact of the Divestitures, non-gaming expenses decreased 83.2% for the three months ended June 30, 2020 compared to the same prior year period in conjunction with the previously discussed decrease in non-gaming revenues. 
 Marketing and Promotions Expenses . Marketing and promotions expenses declined 84.1% for the three months ended June 30, 2020 compared to the same prior year period. Excluding the impact of the Divestitures, marketing and promotions expense decreased 83.2% for the three months ended June 30, 2020 compared to the same prior year period. This decline was primarily due to the reduction or elimination of marketing and promotions expenses during the closure of our properties from mid-March 2020 through mid-May 2020. 
 General and Administrative Expenses . General and administrative expenses declined 44.8% for the three months ended June 30, 2020 compared to the same prior year period. Excluding the impact of the Divestitures, general and administrative expenses decreased 40.4% for the three months ended June 30, 2020 compared to the same prior year period mainly due to the reduction of general and administrative expenses, including utilities and payroll expenses, following the closure of our properties in mid-March 2020 until reopening started in mid-May 2020. 
 Corporate Expenses . For the three months ended June 30, 2020 compared to the same prior year period, corporate expenses decreased 38.0% primarily due to reductions in salaries and wages due to the COVID-19 impact and a decrease in stock compensation expense for the three months ended June 30, 2020 compared to the same prior year period. 
 Depreciation and Amortization Expense . For the three months ended June 30, 2020 compared to the same prior year period, depreciation and amortization expense declined 13.4% mainly due to ceasing depreciation and amortization expense on assets held for sale. Excluding the impact of the Divestitures, depreciation and amortization expense decreased 7.6% for the three months ended June 30, 2020 compared to the same prior year period mainly due to many assets becoming fully depreciated in 2019. 
 40 

 
 

 Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019 
 Net revenues and operating expenses were as follows (dollars in thousands): 
 
 Six Months Ended
June 30, Percent
Change 
 2020 2019 Variance 
 Revenues: 
 
 Gaming and Pari-Mutuel Commissions: 
 
 West 
 $ 60,253 $ 108,899 $ (48,646) (44.7) % 
 Midwest 74,432 170,392 (95,960) (56.3) % 
 South 
 106,955 204,221 (97,266) (47.6) % 
 East 99,708 249,003 (149,295) (60.0) % 
 Central 
 99,880 195,333 (95,453) (48.9) % 
 Total Gaming and Pari-Mutuel Commissions 441,228 927,848 (486,620) (52.4) % 
 Non-gaming: 
 
 West 
 75,174 136,923 (61,749) (45.1) % 
 Midwest 
 9,148 23,634 (14,486) (61.3) % 
 South 
 20,857 45,430 (24,573) (54.1) % 
 East 
 29,574 87,685 (58,111) (66.3) % 
 Central 
 19,673 47,931 (28,258) (59.0) % 
 Corporate and Other 3,885 3,493 392 11.2 % 
 Total Non-gaming 
 158,311 345,096 (186,785) (54.1) % 
 Total Net Revenues 
 599,539 1,272,944 (673,405) (52.9) % 
 Expenses: 
 
 Gaming and Pari-Mutuel Commissions: 
 
 West 
 25,723 41,910 (16,187) (38.6) % 
 Midwest 
 31,261 68,656 (37,395) (54.5) % 
 South 
 55,066 95,318 (40,252) (42.2) % 
 East 
 49,875 120,343 (70,468) (58.6) % 
 Central 
 40,585 87,319 (46,734) (53.5) % 
 Total Gaming and Pari-Mutuel Commissions 
 202,510 413,546 (211,036) (51.0) % 
 Non-gaming 
 
 West 
 44,162 77,796 (33,634) (43.2) % 
 Midwest 
 5,855 12,828 (6,973) (54.4) % 
 South 
 15,249 28,100 (12,851) (45.7) % 
 East 
 20,919 46,358 (25,439) (54.9) % 
 Central 
 13,794 25,558 (11,764) (46.0) % 
 Total Non-gaming 
 99,979 190,640 (90,661) (47.6) % 
 
 Marketing and promotions 
 30,058 64,381 (34,323) (53.3) % 
 General and administrative 
 156,537 237,319 (80,782) (34.0) % 
 Corporate 
 29,532 37,805 (8,273) (21.9) % 
 Impairment charges 
 160,758 958 159,800 16,680.6 % 
 Depreciation and amortization 
 99,372 114,290 (14,918) (13.1) % 
 Total Operating Expenses 
 $ 778,746 $ 1,058,939 $ (280,193) (26.5) % 

 
 
 41 

 
 

 Gaming Revenues and Pari-Mutuel Commissions. For the six months ended June 30, 2020 compared to the same prior year period, gaming revenues and pari-mutuel commissions declined 52.4%. Excluding the impact of the Divestitures, gaming revenues and pari-mutuel commissions decreased 46.5% for the six months ended June 30, 2020 compared to the same prior year period mainly due to reductions in casino volume and pari-mutuel commissions associated with the impact of COVID-19 and the related closures of our properties and race tracks in mid-March 2020 until reopening of properties starting mid-May 2020. 
 Non-gaming Revenues . Non-gaming revenues decreased 54.1% for the six months ended June 30, 2020 compared to the same prior year period. Excluding the impact of the Divestitures, non-gaming revenues declined 52.0% for the six months ended June 30, 2020 compared to the same prior year period mainly due to the impact of COVID-19 and the related closures of our properties, including hotels, restaurants and entertainment venues in mid-March 2020 until reopening of hotels and restaurants starting mid-May 2020 based on government reopening guidelines. 
 Gaming Expenses and Pari-Mutuel Commissions . Gaming expenses and pari-mutuel commissions declined 51.0% for the six months ended June 30, 2020 compared to the same prior year period. Excluding the impact of the Divestitures, gaming expenses and pari-mutuel commissions decreased 42.9% for the six months ended June 30, 2020 compared to the same prior year period in conjunction with the previously discussed decrease in gaming revenues and pari-mutuel commissions. 
 Non-gaming Expenses . Non-gaming expenses declined 47.6% for the six months ended June 30, 2020 compared to the same prior year period. Excluding the impact of the Divestitures, non-gaming expenses decreased 44.9% for the six months ended June 30, 2020 compared to the same prior year period in conjunction with the previously discussed decrease in non-gaming revenues. 
 Marketing and Promotions Expenses . Marketing and promotions expenses declined 53.3% for the six months ended June 30, 2020 compared to the same prior year period. Excluding the impact of the Divestitures, marketing and promotions expense decreased 50.1% for the six months ended June 30, 2020 compared to the same prior year period. This decline was primarily due to savings achieved via the termination of certain marketing contracts, reductions in direct mail costs and continued company-wide changes in marketing and promotional activity. Additionally, to the extent possible, marketing and promotions expenses were reduced or eliminated during the closure of our properties from mid-March 2020 through mid-May 2020. 
 General and Administrative Expenses . General and administrative expenses declined 34.0% for the six months ended June 30, 2020 compared to the same prior year period. Excluding the impact of the Divestitures, general and administrative expenses decreased 28.5% for the six months ended June 30, 2020 compared to the same prior year period mainly due to the centralization of certain services provided to our properties and realized savings achieved through the continued consolidation of purchasing programs. Additionally, general and administrative expenses, including utilities and payroll expenses, were reduced following the closure of our properties in mid-March 2020 until reopening started in mid-May 2020. 
 Corporate Expenses . For the six months ended June 30, 2020 compared to the same prior year period, corporate expenses decreased 21.9% primarily due to reductions in salaries and wages, stock compensation expense, corporate bonus expense, captive insurance expense, certain professional fees and travel costs due to the COVID-19 impact for the six months ended June 30, 2020 compared to the same prior year period. 
 Depreciation and Amortization Expense . For the six months ended June 30, 2020 compared to the same prior year period, depreciation and amortization expense declined 13.1% mainly due to ceasing depreciation and amortization expense on assets held for sale. Excluding the impact of the Divestitures, depreciation and amortization expense decreased 6.7% for the six months ended June 30, 2020 compared to the same prior year period mainly due to many assets becoming fully depreciated in 2019. 
 Supplemental Unaudited Presentation of Consolidated Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA for the Three and Six Months Ended June 30, 2020 and 2019 
 Adjusted EBITDA (defined below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding our ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents net (loss) income before interest expense, (benefit) provision for income taxes, unrealized (gain) loss on investments and marketable securities, depreciation and amortization, stock-based compensation, impairment charges, transaction expenses, severance expense, selling costs associated with the divestitures of properties, equity in income (loss) of unconsolidated affiliates, (gain) loss on the sale or disposal of property and 
 42 

 
 

 equipment, and (gain) loss related to divestitures. Adjusted EBITDA also excludes the expense associated with our GLPI Master Lease as the transaction was accounted for as a financing obligation and the associated expense is included in interest expense. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with accounting principles generally accepted in the United States (“US GAAP”), is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, payments under our GLPI Master Lease and certain regulatory gaming assessments, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide EBITDA information may calculate EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt agreements. 
 The following table summarizes our Adjusted EBITDA for our operating segments for the three and six months ended June 30, 2020 and 2019, respectively, in addition to reconciling net (loss) income to Adjusted EBITDA in accordance with US GAAP (unaudited, in thousands): 
 
 Three Months Ended June 30, 2020 
 West Midwest South East Central Corporate and Other Total 
 Net (loss) income $ (12,711) $ 1,378 $ (10,912) $ (30,456) $ (20,452) $ (26,843) $ (99,996) 
 Interest expense, net 5,295 (32) 4,196 12,842 13,505 32,330 68,136 
 Benefit for income taxes (5,392) (931) (2,757) (3,617) (1,247) (19,717) (33,661) 
 
 Unrealized gain on investments and marketable securities 
 — — — — — (12,806) (12,806) 
 Depreciation and amortization 13,299 4,148 6,786 11,046 11,793 1,867 48,939 
 Stock-based compensation — 1 1 — — 4,227 4,229 
 Transaction expenses (1) — — — — — 12,697 12,697 
 Other (2) 243 84 210 237 (6) 1,311 2,079 
 Adjusted EBITDA $ 734 $ 4,648 $ (2,476) $ (9,948) $ 3,593 $ (6,934) $ (10,383) 

 
 
 43 

 
 

 
 Three Months Ended June 30, 2019 
 West Midwest South East Central Corporate and Other Total 
 Includes Divestitures: 
 Net (loss) income $ 11,348 $ 21,435 $ 12,747 $ 15,981 $ 13,070 $ (55,645) $ 18,936 
 Interest expense, net 4,982 (1) 4,353 12,691 13,306 36,467 71,798 
 (Benefit) provision for income taxes 4,283 7,578 1,923 6,541 1,657 (11,564) 10,418 
 
 Unrealized loss on investments and marketable securities 
 — — — — — 1,398 1,398 
 Depreciation and amortization 13,508 7,714 9,850 12,240 11,480 1,741 56,533 
 Stock-based compensation — 10 — — — 6,499 6,509 
 Transaction expenses (1) — — — — — 7,292 7,292 
 Other (3) 184 17 236 (35) 89 5,286 5,777 
 Adjusted EBITDA $ 34,305 $ 36,753 $ 29,109 $ 47,418 $ 39,602 $ (8,526) $ 178,661 
 
 Divestitures: 
 Net income $ — $ 4,737 $ — $ 3,107 $ — $ — $ 7,844 
 
 Provision for income taxes — 1,241 — 1,156 — — 2,397 
 
 
 Depreciation and amortization — 1,950 — 1,643 — — 3,593 
 Stock-based compensation — 4 — — — — 4 
 
 Other (3) — — — (2) — — (2) 
 Total Divestitures (4) $ — $ 7,932 $ — $ 5,904 $ — $ — $ 13,836 
 
 Excluding Divestitures: 
 Net (loss) income $ 11,348 $ 16,698 $ 12,747 $ 12,874 $ 13,070 $ (55,645) $ 11,092 
 Interest expense, net 4,982 (1) 4,353 12,691 13,306 36,467 71,798 
 (Benefit) provision for income taxes 4,283 6,337 1,923 5,385 1,657 (11,564) 8,021 
 
 Unrealized loss on investments and marketable securities 
 — — — — — 1,398 1,398 
 Depreciation and amortization 13,508 5,764 9,850 10,597 11,480 1,741 52,940 
 Stock-based compensation — 6 — — — 6,499 6,505 
 Transaction expenses (1) — — — — — 7,292 7,292 
 Other (3) 184 17 236 (33) 89 5,286 5,779 
 Total Excluding Divestitures (5) $ 34,305 $ 28,821 $ 29,109 $ 41,514 $ 39,602 $ (8,526) $ 164,825 

 
 
 
 Six Months Ended June 30, 2020 
 West Midwest South East Central Corporate and Other Total 
 Net loss $ (104,011) $ (15,239) $ (24,910) $ (32,647) $ (15,728) $ (83,099) $ (275,634) 
 Interest expense, net 10,466 (42) 8,529 25,661 26,933 63,053 134,600 
 Benefit for income taxes (16,720) (3,658) (4,286) (3,229) (1,285) (41,655) (70,833) 
 Loss on extinguishment of debt — — — — — 158 158 
 Unrealized loss on investments and marketable securities 
 — — — — — 10,202 10,202 
 Depreciation and amortization 27,237 8,670 13,906 22,287 23,556 3,716 99,372 
 Stock-based compensation — 3 3 — — 9,965 9,971 
 Transaction expenses (1) — — — — — 21,991 21,991 
 Other (2) 103,387 36,701 21,986 265 14 (16) 162,337 
 Adjusted EBITDA $ 20,359 $ 26,435 $ 15,228 $ 12,337 $ 33,490 $ (15,685) $ 92,164 

 
 
 44 

 
 

 
 Six Months Ended June 30, 2019 
 West Midwest South East Central Corporate and Other Total 
 Includes Divestitures: 
 Net (loss) income $ 15,665 $ 43,590 $ 32,956 $ 27,149 $ 25,948 $ (88,143) $ 57,165 
 Interest expense, net 10,072 3 8,701 25,530 26,580 74,422 145,308 
 (Benefit) provision for income taxes 5,677 13,252 4,881 9,695 2,575 (15,257) 20,823 
 Unrealized loss on investments and marketable securities 
 — — — — — 2,858 2,858 
 Depreciation and amortization 26,651 16,135 20,865 24,389 22,690 3,560 114,290 
 Stock-based compensation — 25 9 7 — 11,416 11,457 
 Transaction expenses (1) — — — — — 9,186 9,186 
 Other (3) 283 72 368 152 132 (16,781) (15,774) 
 Adjusted EBITDA $ 58,348 $ 73,077 $ 67,780 $ 86,922 $ 77,925 $ (18,739) $ 345,313 
 
 Divestitures: 
 Net income $ — $ 9,887 $ — $ 5,229 $ — $ — $ 15,116 
 Interest expense, net — — — 23 — — 23 
 Provision for income taxes — 2,616 — 1,730 — — 4,346 
 
 Depreciation and amortization — 4,140 — 3,670 — — 7,810 
 Stock-based compensation — 11 — 7 — — 18 
 
 Other (3) — — — 78 — — 78 
 Total Divestitures (6) $ — $ 16,654 $ — $ 10,737 $ — $ — $ 27,391 
 
 Excluding Divestitures: 
 Net (loss) income $ 15,665 $ 33,703 $ 32,956 $ 21,920 $ 25,948 $ (88,143) $ 42,049 
 Interest expense, net 10,072 3 8,701 25,507 26,580 74,422 145,285 
 (Benefit) provision for income taxes 5,677 10,636 4,881 7,965 2,575 (15,257) 16,477 
 Unrealized loss on investments and marketable securities 
 — — — — — 2,858 2,858 
 Depreciation and amortization 26,651 11,995 20,865 20,719 22,690 3,560 106,480 
 Stock-based compensation — 14 9 — — 11,416 11,439 
 Transaction expenses (1) — — — — — 9,186 9,186 
 Other (3) 283 72 368 74 132 (16,781) (15,852) 
 Total Excluding Divestitures (5) $ 58,348 $ 56,423 $ 67,780 $ 76,185 $ 77,925 $ (18,739) $ 317,922 

 (1) Transaction expenses primarily represent costs related to the pending acquisition of Caesars for the three and six months ended June 30, 2020 and 2019, and costs related to the acquisitions of Elgin and Tropicana for the three and six months ended June 30, 2019. 
 (2) Other, for the three and six months ended June 30, 2020, is comprised of severance expense, (gain) loss on the sale or disposal of property and equipment, equity in loss of unconsolidated affiliate, and selling costs associated with the divestitures of Kansas City, Vicksburg, Shreveport, and MontBleu. For the six months ended June 30, 2020, other is also comprised of impairment charges. 
 (3) Other, for the three and six months ended June 30, 2019, is comprised of severance expense, (gain) loss on the sale or disposal of property and equipment, equity in loss of unconsolidated affiliate, and the gain associated with the sales of Presque and Nemacolin. For the six months ended June 30, 2019, other is also comprised of impairment charges. 
 (4) Figures are for Mountaineer, Cape Girardeau and Caruthersville for the three months ended June 30, 2019. 
 45 

 
 

 (5) Total figures for the three months ended June 30, 2019 exclude the results of operations for Mountaineer, Cape Girardeau and Caruthersville. Total figures for the six months ended June 30, 2019 exclude the results of operations for Presque for the period beginning January 1, 2019 and ending January 11, 2019, Nemacolin for the period beginning January 1, 2019 and ending March 8, 2019, and Mountaineer, Cape Girardeau and Caruthersville for the six months ended June 30, 2019. Such presentation does not conform to GAAP or the Securities and Exchange Commission rules for pro forma presentation; however, we believe that the additional financial information will be helpful to investors in comparing current results with results of prior periods. This is non-GAAP data and should not be considered a substitute for data prepared in accordance with GAAP, but should be viewed in addition to our reported results of operations. 
 (6) Figures are for Presque for the period beginning January 1, 2019 and ending January 11, 2019, Nemacolin for the period beginning January 1, 2019 and ending March 8, 2019 and Mountaineer, Cape Girardeau and Caruthersville for the six months ended June 30, 2019. 
 
 Liquidity and Capital Resources 
 We are a holding company and our only significant assets are ownership interests in our subsidiaries. Our ability to fund our obligations depends on existing cash on hand, contracted asset sales, cash flow from our subsidiaries and our ability to raise capital. Our primary sources of liquidity and capital resources have been existing cash on hand, cash flow from operations, borrowings under our revolving credit facility, proceeds from the issuance of debt and equity securities and proceeds from completed asset sales. 
 Our cash requirements fluctuate significantly depending on our decisions with respect to business acquisitions or divestitures and strategic capital investments to maintain the quality of our properties. Beginning on May 18, 2020, we began reopening our properties and as of June 30, 2020 we have resumed operations at all of our properties, with the exception of Elgin and Trop AC which reopened on July 1 and July 2, 2020, respectively. In an effort to mitigate the impacts of COVID-19 on our business and maintain liquidity, we furloughed approximately 90% of our employees beginning on April 11, 2020. A portion of the workforce has returned to service as the properties have resumed with limited capacities and in compliance with operating restrictions in accordance with governmental orders, directives and guidelines. As a result of these payroll changes combined with other cost saving measures, our operating expenses were reduced significantly. 
 We expect that our primary capital requirements going forward will relate to the operation and maintenance of our properties, taxes, servicing our outstanding indebtedness, and rent payments under our GLPI Master Lease, the VICI Leases and other leases. We make capital expenditures and perform continuing refurbishment and maintenance at our properties to maintain our quality standards. Our capital expenditure requirements for 2020 are expected to significantly increase as a result of the additional properties acquired in the Merger. In addition to our future capital expenditures for the normal course of business, we funded $400 million to escrow as of the closing of the Merger and will utilize those funds in accordance with a three year capital expenditure plan in the state of New Jersey. We will also be required to fund a similar escrow account with $25 million for improvements at our racing properties within the state of Indiana. During the remainder of 2020, we plan to spend an estimated $150 million to $175 million on capital expenditures. We expect to use cash on hand and cash generated from operations to meet such obligations. 
 In an effort to maintain liquidity and provide financial flexibility as the effects of COVID-19 continue to evolve and impact global financial markets, we borrowed $465.0 million under our revolving credit facility on March 16, 2020. We repaid $357.0 million during the second quarter and had $108.0 million outstanding as of June 30, 2020. In addition, we had $372.9 million of available borrowing capacity, after consideration of $19.1 million in outstanding letters of credit, under our Revolving Credit Facility. On July 1, 2020, we utilized proceeds from the sale of our interests in Kansas City and Vicksburg to pay down the remaining $108.0 million on the revolving credit facility. 
 On June 19, 2020, we completed a public offering of 20,700,000 shares (including the shares sold pursuant to the underwriters’ option) of common stock, at a public offering price of $39.00 per share, with proceeds of $772.4 million, net of fees and estimated expenses of $34.9 million. 
 46 

 
 

 As of June 30, 2020, our cash on hand and revolving borrowing capacity was as follows: 
 
 June 30, 2020 
 (in thousands) 
 Cash and cash equivalents $ 950,483 
 Revolver capacity 392,000 
 Revolver capacity committed to letters of credit (19,135) 
 Total $ 1,323,348 

 
 
 On July 6, 2020, we issued $3.4 billion of 2025 Secured Notes, $1.8 billion of 2027 Senior Notes and $1.0 billion of CRC Secured Notes in connection with the Merger (collectively, the “Debt Financing”). 
 On July 20, 2020, in connection with the Merger, we consummated the sale leaseback transactions related to Harrah’s New Orleans, Harrah’s Laughlin and Harrah’s Resort Atlantic City, including the Harrah’s Atlantic City Waterfront Conference Center, for approximately $1.82 billion of net proceeds. Additionally, we received a one-time payment from VICI of approximately $1.38 billion for amendments to VICI Leases. Furthermore, we entered into the ERI Revolving Credit Facility which provides for a five-year senior secured revolving credit facility in an aggregate principal amount of $1.2 billion, including an incremental agreement which is, as discussed below, subject to regulatory approval. In addition, the borrowing capacity and obligations under CRC’s existing $1.0 billion revolving credit facility remain outstanding following the consummation of the Merger. 
 In connection with the consummation of the Merger, on July 20, 2020, our current and future liquidity significantly changed. A portion of the proceeds from our newly issued debt and proceeds we received from VICI, as well as cash on hand generated from our sale of common stock, were used (a) to fund a portion of the cash consideration of the Merger, (b) to prepay in full the loans outstanding and terminate all commitments under our existing Credit Agreement, dated as of April 17, 2017, (c) to satisfy and discharge our Senior Notes, (d) to repay $975 million of the outstanding amount under the existing CRC revolving credit facility, (e) to repay in full the loans outstanding and terminate all commitments under the existing CEOC, LLC Credit Agreement, dated as of October 6, 2017, (f) to pay fees and expenses related to the financing arrangements, and (g) for general corporate use. As a result of these transactions, we may incur a loss on extinguishment of debt during the third quarter of 2020, which could be significant. 
 Following the completion of the transactions described in conjunction with the closing of the Merger, we estimate our total liquidity to be approximately $4.3 billion, which includes approximately $2.3 billion of cash on hand, and $2.0 billion of availability on our revolving credit facilities. We expect to obtain an additional $210 million of capacity on our revolving credit facilities upon regulatory approval and generate approximately $500 million of additional proceeds from VICI with a sale of excess land and a new mortgage note during the third quarter of 2020. 
 A significant portion of our liquidity needs are for debt service and payments associated with our leases. In addition to our newly issued debt, our debt obligations increased as a result of outstanding debt of Former Caesars that remained outstanding following the consummation of the Merger. Our estimated debt service (including principal and interest) is $200 million for the remainder of 2020. The convertible notes assumed in connection with the Merger are expected to be settled during 2020. The convertible notes are convertible into weighted average of the number of shares of Company Common Stock and amount of cash actually received per share by holders of common stock of Former Caesars that made elections for consideration in the Merger. We currently estimate a cash payment of approximately $1.3 billion to settle the convertible notes during 2020. We lease certain real property assets from third parties, including GLPI and VICI. We estimate our lease payments to be approximately $540 million for the remainder of 2020. 
 On April 24, 2020, we entered into a definitive purchase agreement with Twin River to sell Eldorado Shreveport and MontBleu for aggregate consideration of $155 million. The agreement is subject to regulatory approvals and expected to close in the first quarter of 2021. We also expect to enter into agreements to divest three properties in the state of Indiana as required by the Indiana Gaming Commission prior to December 31, 2020. 
 We expect that borrowings incurred under the ERI Revolving Credit Facility, the CRC revolving credit facility and Convention Center Mortgage Loan and cash generated from operations, the equity offering consummated in July 2020 and the announced asset sales, net of associated taxes, will be sufficient to fund our operations, capital requirements and service our outstanding indebtedness for the next twelve months. However, the COVID-19 public health emergency has had, and is expected to continue to have, an adverse effect on our business, financial condition and results of operations and has caused, and may continue to cause, disruption in the financial markets. While we have undertaken efforts to mitigate the impacts of COVID-19 on our business and maintain liquidity, the extent of the ongoing and future effects of the COVID-19 public health 
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 emergency on our business, results of operations and financial condition is uncertain and may adversely impact our liquidity in the future. Our ability to access additional capital may be adversely affected by the disruption in the financial markets caused by the COVID-19 public health emergency, restrictions on incurring additional indebtedness contained in the agreements governing our indebtedness and the impact of the public health emergency on our business, results of operations and financial condition. 
 Operating Cash Flows . For the six months ended June 30, 2020 , cash flows used by operating activities totaled $80.5 million compared to $127.9 million provided for the same prior year period. Our operating cash flows generally follow trends in operating income, excluding non-cash charges. Changes in the balance sheet accounts and the timing of significant payments, including interest , rent and tax payments will impact our operating cash flows. The decrease in operating cash flows compared to the same prior year period was primarily due to cash used to continue to pay operating expenses, including rent and interest payments, during the temporary closure of our properties as a result of the COVID-19 public health emergency from mid-March to mid-May 2020. 
 Investing Cash Flow and Capital Expenditures . Net cash flows used in investing activities totaled $41.4 million for the six months ended June 30, 2020 compared to $75.5 million provided by investing activities in the same prior year period. Our investing cash flows generally fluctuate depending upon the timing of strategic and maintenance capital expenditures in addition to business acquisitions or dispositions. Net cash used in investing activities for the six months ended June 30, 2020 was primarily due to $41.0 million cash used for capital expenditures for various property enhancement and maintenance projects along with equipment purchases. Net cash flows provided by investing activities for the six months ended June 30, 2019 was primarily due to $178.9 million in net proceeds from the sales of Presque Isle Downs and Nemacolin offset by cash used totaling $97.1 million for capital expenditures. 
 Financing Cash Flow . Net cash provided by financing activities for the six months ended June 30, 2020 totaled $862.7 million compared to $253.2 million used in financing activities for the same prior year period. The cash provided by financing activities for the six months ended June 30, 2020 was principally due to $772.4 million of proceeds from issuance of common stock and $465.0 million of borrowings under the Revolving Credit Facility offset by $357.0 million and $10.0 million of payments under the Revolving Credit Facility and Term Loan, respectively. The cash used in financing activities for the six months ended June 30, 2019 was principally due to net payments under the Revolving Credit Facility partially funded by the proceeds from the sales of Presque and Nemacolin. 
 
 Debt and Master Lease Covenant Compliance 
 Due to the ongoing effects of the COVID-19 public health emergency, our ability to maintain compliance with the financial covenants under our Credit Facility was negatively impacted. On June 15, 2020, we entered into an amendment to the Credit Facility which provided relief for the financial covenant requirement under the existing Credit Facility agreement through September 30, 2021. During the covenant relief period we were required to maintain a minimum liquidity level, including unrestricted cash and unused commitments under the Revolving Credit Facility of $200.0 million. 
 Additionally, our GLPI Master Lease contains certain operating, capital expenditure and financial covenants thereunder, and our ability to maintain compliance with these covenants was also negatively impacted. On June 15, 2020, we entered into an amendment to the GLPI Master Lease which, among other things, provides certain relief under these covenants in the event of facility closures due to pandemics, governmental restrictions and certain other instances of unavoidable delay. Subsequent to June 30, 2020, the amendment to the GLPI Master Lease became effective as the Company obtained all necessary approvals and the applicable waiting period expired. 
 As of June 30, 2020, we were in compliance with all of the applicable financial covenants under the 7% Senior Notes due 2023, 6% Senior Notes due 2025, 6% Senior Notes due 2026, and the Lumière Loan. 
 
 Share Repurchase Program 
 On November 8, 2018, we issued a press release announcing that its Board of Directors has authorized a $150 million common stock repurchase program (the “Share Repurchase Program”) pursuant to which we may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no minimum number of shares of common stock that we are required to repurchase under the Share Repurchase Program. 
 As of June 30, 2020, we acquired 223,823 shares of common stock under the program at an aggregate value of $9.1 million and an average of $40.80 per share. No shares were repurchased during the six months ended June 30, 2020 and 2019. 
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 Debt Obligations and GLPI Master Lease 
 Term Loan and Revolving Credit Facility 
 As of June 30, 2020, we were party to a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto dated as of April 17, 2017 (as amended, the “Credit Facility”), consisting of a $1.5 billion term loan facility (the “Term Loan Facility” or “Term Loan”) and a $500.0 million revolving credit facility (the “Revolving Credit Facility”). The Credit Facility provided that our obligations under the Revolving Credit Facility would mature on October 1, 2023 and our obligations under the Term Loan Facility would mature on April 17, 2024. 
 As of June 30, 2020, we had $488.8 million outstanding on the Term Loan and $108.0 million outstanding under the Revolving Credit Facility. During the six months ended June 30, 2020, we elected to draw down $465.0 million of availability under the Revolving Credit Facility as a precautionary measure to enhance our liquidity and provide financial flexibility as the effects of COVID-19 continue to evolve and impact global financial markets and we repaid $357.0 million of the outstanding balance. We had $372.9 million of available borrowing capacity, after consideration of $19.1 million in outstanding letters of credit under our Revolving Credit Facility, as of June 30, 2020. 
 The interest rate per annum applicable to loans under the Revolving Credit Facility are, at our option, either LIBOR plus a margin ranging from 1.75% to 2.50% or a base rate plus a margin from 0.75% to 1.50%, the margin is based on our total leverage ratio. The interest rate per annum applicable to the loans under the Term Loan Facility is, at our option, either LIBOR plus 2.25% or a base rate plus 1.25%; provided, however, that in no event will LIBOR be less than zero or the base rate be less than 1.00%. Additionally, we pay a commitment fee on the unused portion of the Revolving Credit Facility of 0.50% per annum. As of June 30, 2020, the weighted average interest rates on the Term Loan and Revolving Credit Facility were 3.25% and 3.13%, respectively. 
 On July 20, 2020, in connection with the Merger, all amounts outstanding under the Credit Facility, including accrued interest and fees, were paid in full, the commitment to extend credit under the Credit Facility were terminated and all guarantees and security interests in respect of the Credit Facility were released. 
 Senior Notes 
 6% Senior Notes due 2026 
 On September 20, 2018, Delta Merger Sub, Inc. (“Escrow Issuer”), a Delaware corporation and a wholly-owned subsidiary of the Company, issued $600 million aggregate principal amount of 6.0% senior notes due 2026 (the “6% Senior Notes due 2026”) pursuant to an indenture, dated as of September 20, 2018 (the “2026 Indenture”), between Escrow Issuer and U.S. Bank, National Association, as Trustee. Interest on the 6% Senior Notes due 2026 will be paid semi-annually in arrears on March 15 and September 15. 
 The 6% Senior Notes due 2026 were general unsecured obligations of Escrow Issuer’s upon issuance and, upon the assumption of such obligations by the Company and the subsidiary guarantors (the “Guarantors”) upon consummation of the Tropicana Acquisition, became general unsecured obligations of the Company and the Guarantors, ranking senior in right of payment to all of the Company’s existing and future debt that is expressly subordinated in right of payment to the 6% Senior Notes due 2026 and the guarantees, ranking equally in right of payment with all of the applicable obligor’s existing and future senior liabilities, including the obligations under the Company’s existing 7% Senior Notes due 2023 and 6% Senior Notes due 2025, and are effectively subordinated to all of the applicable obligor’s existing and future secured debt, including indebtedness under the Company’s Term Loan and Revolving Credit Facility and the Lumière Note (as defined in the 2026 Indenture), in each case, to the extent of the value of the collateral securing such debt. In addition, the 6% Senior Notes due 2026 and the related guarantees are structurally subordinated to all existing and future indebtedness and other liabilities of the Company’s subsidiaries and other entities in which the Company has an equity interest that do not guarantee the 6% Senior Notes due 2026 (other than indebtedness and liabilities owed to the Company or the Guarantors). 
 In connection with the Merger, $210 million aggregate principal amount of the 6% Senior Notes due 2026 was redeemed on July 25, 2020 at a redemption price of 106% of such aggregate principal amount, and the remaining and outstanding principal amount of the 6% Senior Notes due 2026 was redeemed on July 26, 2020 at a redemption price of 100% of the aggregate principal amount thereof plus the Applicable Premium as defined in the 2026 Indenture. 
 6% Senior Notes due 2025 
 On March 29, 2017, Eagle II issued at par $375.0 million aggregate principal amount of 6.0% senior notes due 2025 (the “6% Senior Notes due 2025”) pursuant to an indenture, dated as of March 29, 2017 (the “2025 Indenture”), between Eagle II and U.S. Bank, National Association, as Trustee. The 6% Senior Notes due 2025 will mature on April 1, 2025, with interest 
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 payable semi-annually in arrears on April 1 and October 1. In connection with the consummation of the Isle Acquisition on May 1, 2017, the Company assumed Eagle II’s obligations under the 6% Senior Notes due 2025 and the 2025 Indenture and certain of the Company’s subsidiaries (including Isle and certain of its subsidiaries) executed guarantees of the Company’s obligations under the 6% Senior Notes due 2025. 
 On September 13, 2017, the Company issued an additional $500.0 million principal amount of its 6% Senior Notes due 2025 at an issue price equal to 105.5% of the principal amount of the 6% Senior Notes due 2025. The additional notes were issued pursuant to the 2025 Indenture that governs the 6% Senior Notes due 2025. The Company used the proceeds of the offering to repay $78.0 million of outstanding borrowings under the previous revolving credit facility and used the remainder to repay $444.5 million outstanding borrowings under the previous term loan facility and related accrued interest. 
 In connection with the Merger, the 6% Senior Notes due 2025 were redeemed on July 25, 2020 at a redemption price of 104.5% of the aggregate principal amount. 
 7% Senior Notes due 2023 
 On July 23, 2015, the Company issued at par $375.0 million in aggregate principal amount of 7.0% senior notes due 2023 (“7% Senior Notes due 2023”) pursuant to an indenture, dated as of July 23, 2015 (the “2023 Indenture”), between the Company and U.S. Bank, National Association, as Trustee. The 7% Senior Notes due 2023 will mature on August 1, 2023, with interest payable semi-annually in arrears on February 1 and August 1 of each year. 
 In connection with the Merger, the 7% Senior Notes due 2023 were redeemed on July 25, 2020 at a redemption price of 103.5% of the aggregate principal amount. 
 Lumière Loan 
 We borrowed $246.0 million from GLPI to fund the purchase price of the real estate underlying Lumière. The Lumière Loan bears interest at a rate equal to (i) 9.09% until October 1, 2019 and (ii) 9.27% until October 1, 2020, and matures on October 1, 2020. The Lumière Loan was secured by a first priority mortgage on the Lumière real property that was released pursuant to its terms on October 1, 2019. On June 24,2020, we received approval from Missouri Gaming Commission to sell Lumière to GLPI and leaseback the property under a long term financing obligation. The loan is scheduled to mature during 2020; however, we have classified the loan balance as long-term debt as of June 30, 2020 as the Lumière real estate will be refinanced under a long-term lease, or financing obligation, during the third quarter of 2020. 
 GLPI Master Lease 
 Our GLPI Master Lease is accounted for as a financing obligation and totaled $975.8 million as of June 30, 2020. Additionally, our GLPI Master Lease contains certain operating, capital expenditure and financial covenants thereunder, and our ability to maintain compliance with these covenants was also negatively impacted. On June 15, 2020, we entered into an amendment to the GLPI Master Lease which, among other things, provides certain relief under these covenants in the event of facility closures due to pandemics, governmental restrictions and certain other instances of unavoidable delay. Subsequent to June 30, 2020, the amendment to the GLPI Master Lease became effective as we obtained all necessary approvals and the applicable waiting period expired. See Note 10 to our Consolidated Financial Statements for additional information about our GLPI Master Lease and related matters. 
 
 Contractual Obligations 
 There have been no material changes during the six months ended June 30, 2020 to our contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019. 
 
 Summarized Information of Guarantors 
 Certain of our wholly-owned subsidiaries have fully and unconditionally guaranteed on a joint and several basis, the payment of all obligations under our 7% Senior Notes due 2023, 6% Senior Notes due 2025, 6% Senior Notes due 2026 and Credit Facility. There were no changes in our wholly-owned subsidiaries serving as guarantors, on a joint and several basis during the six months ended June 30, 2020. Our debt obligations as of June 30, 2020 are considered to be obligations of Eldorado Resorts, Inc., prior to the consummation of the Merger and our subsequent name change. 
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 The consolidating condensed balance sheet as of June 30, 2020 is as follows: 
 
 
 
 Obligor Group Non-Obligors Consolidating
and Eliminating
Entries Eldorado
Resorts, Inc.
Consolidated 
 (in thousands) 
 Current assets $ 1,512,907 $ 21,830 $ — $ 1,534,737 
 Intercompany (payables) receivables (7,831) 7,831 — — 
 Other non-current assets 4,609,918 3,792 — 4,613,710 
 Current liabilities 461,638 14,364 — 476,002 
 Non-current liabilities 4,057,595 (1,599) — 4,055,996 

 The consolidating condensed balance sheet as of December 31, 2019 is as follows: 
 
 Obligor Group Non-Obligors Consolidating
and Eliminating
Entries Eldorado
Resorts, Inc.
Consolidated 
 (in thousands) 
 Current assets $ 582,918 $ 21,725 $ — $ 604,643 
 Intercompany receivables (payables) 1,790 (1,790) — — 
 Other non-current assets 8,876,547 13,768 (3,854,405) 5,035,910 
 Current liabilities 673,403 15,043 — 688,446 
 Non-current liabilities 3,836,939 (2,089) — 3,834,850 

 The consolidating condensed statement of operations for the three months ended June 30, 2020 is as follows: 
 
 Obligor Group Non-Obligors Consolidating and Eliminating Entries Eldorado Resorts, Inc. Consolidated 
 (in thousands) 
 Net revenues $ 125,514 $ 956 $ — $ 126,470 
 Operating (loss) income (79,253) 926 — (78,327) 
 Interest expense, net (68,280) 144 — (68,136) 
 Net (loss) income (100,845) 849 — (99,996) 

 The consolidating condensed statement of operations for the three months ended June 30, 2019 is as follows: 
 
 Obligor Group Non-Obligors Consolidating and Eliminating Entries Eldorado Resorts, Inc. Consolidated 
 (in thousands) 
 Net revenues $ 635,597 $ 1,524 $ — $ 637,121 
 Operating (loss) income 101,623 927 — 102,550 
 Interest expense, net (71,310) (488) — (71,798) 
 Net (loss) income 78,757 198 (60,019) 18,936 

 The consolidating condensed statement of operations for the six months ended June 30, 2020 is as follows: 
 
 Obligor Group Non-Obligors Consolidating
and Eliminating
Entries Eldorado
Resorts, Inc.
Consolidated 
 (in thousands) 
 Net revenues $ 597,373 $ 2,166 $ — $ 599,539 
 Operating (loss) income (204,125) 2,618 — (201,507) 
 Interest expense, net (134,954) 354 — (134,600) 
 Net (loss) income (278,167) 2,533 — (275,634) 

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 The consolidating condensed statement of operations for the six months ended June 30, 2019 is as follows: 
 
 Obligor Group Non-Obligors Consolidating
and Eliminating
Entries Eldorado
Resorts, Inc.
Consolidated 
 (in thousands) 
 Net revenues $ 1,264,937 $ 8,007 $ — $ 1,272,944 
 Operating income 223,656 2,498 — 226,154 
 Interest expense, net (144,575) (733) — (145,308) 
 Net income (loss) 188,242 1,196 (132,273) 57,165 

 
 Other Liquidity Matters 
 We are faced with certain contingencies involving litigation and environmental remediation and compliance. These commitments and contingencies are discussed in “Part II, Item 1. Legal Proceedings” and Note 14 to our unaudited consolidated financial statements, both of which are included elsewhere in this report. In addition, new competition may have a material adverse effect on our revenues, and could have a similar adverse effect on our liquidity. See “Part I, Item 1A. Risk Factors—Risks Related to Our Business” which is included in our Annual Report on Form 10-K for the year ended December 31, 2019 and “Part II, Item IA. Risk Factors” which is included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. 
 
 Critical Accounting Policies 
 Our critical accounting policies disclosures are included in our Annual Report on Form 10-K for the year ended December 31, 2019. Except as described in Note 1 to the accompanying condensed notes of these consolidated financial statements, we believe there have been no material changes since December 31, 2019. We have not substantively changed the application of our policies and there have been no material changes in assumptions or estimation techniques used as compared to prior periods. 
 
 Off-Balance Sheet Arrangements 
 We do not currently have any off-balance sheet arrangements.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
Caesars Entertainment, Inc. 10-Q

Item 2. Management’s Discussion and Analysis
